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Latin America and the Caribbean

Do better roads really improve lives?

Eric Lancelot's picture

How can improved roads change peoples’ lives? How much do people benefit from road projects? Answering these seemingly simple questions is, in fact, much trickier than it appears.

We recently concluded an impact evaluation to measure the socio-economic impacts of World Bank-financed municipal road improvements on poor rural households in the state of Tocantins, Brazil. After 10 years of study, what were the results and lessons learned? And how did we go about conducting the evaluation?

The study followed a methodology traditionally used in impact evaluations in the social sector and was based on a precedent in Vietnam. Throughout the state, one of the least-developed and least-populated in Brazil, most municipal roads are unpaved with inadequate maintenance. The World Bank’s municipal roads project helped construct 700 concrete bridges and 2,100 culverts crossing rivers and streams, providing year-round access to remote populations that once couldn’t access municipal centers during rainy season.

The anticipated result chain of the project was as follows: improvement of physical accessibility would contribute to increase travel demand to markets, schools and health services. This would, in turn, contribute to improved education, better health and increased business opportunities. Finally, it would result in long-term household income growth.

Our study aimed at measuring these impacts through a “difference in differences with matching,” a method that compares a treatment group (population benefiting from the interventions) and a control group (population that does not), while ensuring similar socio-economic characteristics (or comparability) between groups. An “instrumental variables estimator” was then used to confirm the robustness of the results.

The results show positive socio-economic impacts to rural residents, as well as provides for several policy implications:

Unemployment rates are falling—but what about youth and women?

Tamar Manuelyan Atinc's picture

Persistently high unemployment rates continue to trouble policymakers in developed and developing countries alike—but the recent Job Trends report brings some good news. After successive years of disappointing labor market performance, several countries in Eastern Europe may finally be turning the corner. These countries suffered most during the financial crisis, so the recovery in job creation is much needed to boost family incomes. In the rest of the developing world, the headlines are positive even while we see some moderation in employment and wage growth in Latin America and East Asia.

I have two concerns at this stage. I suspect most observers of the world economy share my first concern that the incipient recovery is fragile, given the continuing economic turmoil in Europe. But I am also concerned with what’s happening with specific groups, such as youth and women. I have a hunch that the recovery is and will be uneven with youth, women and the less skilled having a harder time finding jobs—even if aggregate numbers show steady gains. The crisis hit young workers hard, particularly young men, and countries are dealing with long-term consequences. Unfortunately, few countries know what’s happening with groups of workers because the data are not collected routinely or if they are, the results are available only with a relatively long lag time.

Where recent data are available, the story is mixed. Although youth unemployment remains alarmingly high at 20-30 percent,

Latin America: more public-private partnerships needed to improve infrastructure

Jordan Schwartz's picture

Latin America: more public-private partnerships needed to improve infrastructure

There are three people in Latin American and the Caribbean who care about Public-Private Partnerships or PPPs as they’re widely known. You may have met them. You might even be one. In case not, let me introduce you...

First and foremost, please meet Madame Minister of Finance. She’s busy, she’s stressed and she’s always balancing two concerns that run counter to each other, at least in the short run: growth and budget. Private investment in services might help one without hurting the other.

Shakira brings hope for kids in Latin America (and some glamour to the World Bank...)

Saadia Iqbal's picture

In a place full of economists and other nerdy types, glamour is hard to come by. That's right, I'm talking about the World Bank (with the exception of the Youthink! team, of course).

So, it was pretty exciting when pop superstar Shakira visited the other day.

Even more exciting, though, is the project that Shakira came to launch: a $300 million partnership with the World Bank to invest in children in the Latin America and Caribbean region.